FRENCKEN GROUP LIMITED
ANNUAL REPORT 2015
54
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(b) Group accounting (Cont’d)
Subsidiaries (Cont’d)
(i)
Consolidation (Cont’d)
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities
of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing
whether or not the Company’s voting rights in an investee are sufficient to give it power, including:
• The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of
the other vote holders;
• Potential voting rights held by the Company, other vote holders or other parties;
• Rights arising from other contractual arrangements; and
• Any additional facts and circumstances that indicate that the Company has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including
voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated income statement and statement
of comprehensive income from the date the Company gains control until the date when the Company
ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the
Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to
the owners of the Company and to the non-controlling interests even if this results in the non-controlling
interests having a deficit balance.
In preparing the consolidated financial statements, intercompany transactions, balances and unrealised
gains on transactions between group companies are eliminated. Unrealised losses are also eliminated
but are considered an impairment indicator of the assets transferred. Where necessary, adjustments are
made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s
accounting policies.
Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary
attributable to the interests which are not owned directly or indirectly by the equity holders of the
Company. They are shown separately in the consolidated income statement, statement of comprehensive
income, statement of changes in equity and balance sheet. Non-controlling interests shown in total
comprehensive income is attributed to the non-controlling interests based on their respective interests in
a subsidiary, even if this results in the non-controlling interests having a deficit balance.
Please refer to Note 2(c) for the Company’s accounting policy on investments in subsidiaries.
